Digital Playbook for SMBs: A deep dive into building digital products for SMBs
The COVID-19 pandemic has opened up a big business opportunity for building digital products, solutions, and platforms for SMBs. With Indian SMBs embracing technology at a breakneck pace, the potential for digital transformation is large.
A 2019 Zinnov report had estimated the total digital opportunity offered by Indian MSMEs will grow from around $30 billion in 2019 to $85 billion in 2024.
In a video interaction on SMBStory’s Digital Playbook for SMBs, Hiren Shah, Founder and Chairman, Vertoz, and Logesh Velusamy, Founder and CEO, Effitrac, took a deep dive into building digital products for SMBs.
Logesh said, “The most important factor for building digital solutions for SMBs is understanding the problem you are trying to solve. Product builders and entrepreneurs may begin solving for a problem that isn’t really an issue for SMB customers. So the entrepreneurs must first speak to these end-customers to understand their pain points and verify if their perspectives match.”
Logesh — who is passionate about empowering SMBs with technology solutions made especially for them — has built an end-to-end SaaS product. Effitrac offers SMBs business process tools that efficiently track all aspects of their business and covers books, CRM, ERP, and analytics.
Started in Coimbatore in 2012, Effitrac has over 30,000 users and 250 SMB clients. It competes with Tally, QuickBooks, and Zoho in the industry of digital adoption for SMBs.
Logesh added that knowing technology is not the same as having the ability to build a useful tool.
“Usability and simplicity are important to help users understand a digital solution. Further, SMBs are generally not used to running their business digitally, and so, they won’t adopt a tech solution that offers little to no assistance and customer service at the ground level,” he said.
Understanding the customer
SMBs are known for stability and generating consistent revenues, but they have traditionally been hesitant to adopt any technology. The COVID-19 pandemic has accelerated the adoption of tools such as digital payments, accounting solutions, CRM, ERP, etc.
According to Hiren, these SMBs often don’t know what they need. “Users need something, but they don’t know what they want. Entrepreneurs and product builders have to read between the lines to match a problem area with existing technology," he said, adding:
"Only after this step, they should build a team based on the exact nature of the problem being solved.”
For over 20 years, Hiren has been adding value to the lives of his customers — both large organisations and SMBs. His company Vertoz helps businesses advertise their products and services efficiently using digital media.
Vertoz’s programmatic ad platform, ‘Ingenious Plex,’ uses codes and algorithms to match ad buyers with the right sellers, and consequently, with the right audience.
Hiren added, “Buyers of digital solutions, which are SMBs in this case, do not need to reinvent the wheel. They can explore plenty of existing solutions that may work for them. They should measure growth after implementing a solution, and if it isn’t working, they should scrap it. They need to be agile about adopting the technology.”
Need for simplicity
During the video chat, the entrepreneurs also stressed on the need for simplifying the digital solutions built for SMBs. The key to acquiring SMB users at scale lies in the simplicity of the product. However, this is something only some players like Vyapar, OkCredit, and Khatabook have cracked.
For instance, the Vyapar app does not have ‘credit’ or ‘debit’ sections, as its Founder Sumit Agarwal believes most SMB owners have little to no knowledge of accounting terms. The app classifies a transaction as income or expense on its own.
Logesh said such solutions make more sense for SMBs as these businesses usually don’t hire an accountant to do the books.
“There’s no point in building a solution suitable for an accountant. If product builders want SMBs to use their solutions, they need to understand that most SMB owners do not understand terms like credit and debit,” he explained.
Although simplicity and cutting down on new features seems counterintuitive, both Logesh and Hiren agreed that it remains the way to go for building digital products for SMBs.
Edited by Suman Singh